Introduction to Supply Side Policies (Online Lesson)
- AS, A-Level, IB
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 29 Apr 2020
In this online lesson, we cover the basics of supply side policies and their impact on an economy.
WHAT YOU'LL STUDY IN THIS ONLINE LESSON
- the meaning of supply side policies, and how we can analyse their impact using diagrams
- the difference between free-market and interventionist policies
- the UK's productivity problem, and how supply side policies could help
Additional teacher guidance is provided at the end of this lesson. Thank you to Cathy Williams and Jon Clark for their contributions to this online lesson.
HOW TO USE THIS ONLINE LESSON
Follow along in order of the activities shown below. Some are interactive game-based activities, designed to test your understanding and application of supply side policies. Others are based on short videos, including activities for you to think about and try at home, as well as some extra worksheet-based activities.
If you would like to download a simple PDF worksheet to accompany the video activities, you can download it here: Introduction To Supply Side Policies. You can print it off and annotate it for your own notes, or make your own notes on a separate piece of paper to add to your school/college file.
ACTIVITY 1: THINKING AND DRAWING TASK - DESIGN A CITY
Before we look at the theory of supply side policies, have a go at this practical task, which should show you that you actually know a lot about this topic anyway! You can either use a blank sheet of paper for your drawing, or download and print off this City Planning Sheet. Your task is to design your own small city from scratch! Think carefully about all the aspects that will be important, from transport to communications and safety.
When you have finished your drawing, take some time to think about which elements of your city would have to be provided by a government and which would most likely be provided by the private sector.
Finally, think about how your city could grow and expand. What else would be needed? Who or what would enable this to happen?
ACTIVITY 2: VIDEO - SUPPLY SIDE POLICIES AND THE MACRO OBJECTIVES
In this video, we take a look at the nature of supply side policies, and consider how to show their impact on PPFs and AD/AS diagrams. We then look at how the use of supply side policies can impact positively on the main macroeconomic objectives.
ACTIVITY 3: GAME - THE ECONOMY SPECTRUM
In this applied activity, you need to think about the extent to which given economies are free-market or command/planned in nature. You will most likely have covered this topic early in your microeconomics course, but it provides a great synoptic connection to our next topic of free-market v interventionist supply side policies.
ACTIVITY 4: VIDEO - FREE MARKET AND INTERVENTIONIST SUPPLY SIDE POLICIES
In this video, we look at the difference between free market and interventionist policies, and apply this knowledge to considering the different factors of production. There is then an opportunity for you to practise your analytical skills in writing exam-style paragraphs.
ACTIVITY 5: READING AND THINKING TASK - FLEXIBLE LABOUR MARKETS
The link between supply side policies and labour markets is very close, and highly synoptic. If a labour market is flexible, it means that labour can quickly and easily respond to changes in the labour market. This can occur in a number of ways, for example, by having transferable skills, being able to travel, being able to alter the hours worked etc.
Have a go at this downloadable activity: Flexible Flexibilities. Here, you will be able to categorise different aspects of flexible labour markets.
Next, take a look at some of these reading suggestions, and make your own notes as you go along:
- a consideration of why Britain's flexible labour market has allowed the economy to improve its growth, from the British Chambers of Commerce
- Geoff Riley's overview of the pros and cons of flexible labour markets in the UK
- this analysis from the Financial Times, looking at whether the UK's flexible labour market could be a cause of the UK's "productivity puzzle"
ACTIVITY 6: GAME - INFRASTRUCTURE PROJECTS
In this interactive game, you will find out more about real-world infrastructure projects. Remember that having examples at your fingertips in an exam is really important!
ACTIVITY 7: VIDEO - THE UK'S PRODUCTIVITY PUZZLE AND SUPPLY SIDE POLICIES
Since the Financial Crisis 2007-2009, the UK's productivity growth has completely stalled. We call this phenomenon a "productivity puzzle". In this video, we explore some of the possible reasons for this by looking at some UK data (whilst also practising the all-important quantitative skills!) and consider how supply side policies could be used to tackle this productivity problem.
ACTIVITY 8: SYNOPTIC ACTIVITY - INNOVATION
Innovation is a key factor in improving long-run growth rates, and synoptic analysis is a key factor for exam success! Have a go at the questions on this Synoptic Assessment Mat to build your knowledge of innovation and your synoptic skills.
EXTENSION READING TASK 1 - A LEFT-WING CRITIQUE
There are some commentators, mostly "on the left", who believe that supply side policies are damaging. This topic is covered in more detail in the Online Lesson on Evaluating Supply Side Policies. But it's worth taking an initial look at some ideas. Try this article from the Democracy online journal. To what extent do you agree with the argument presented?
EXTENSION READING TASK 2 - A SUPPLY SIDE RESPONSE TO COVID19
Do we need a demand-side or supply-side policy response to the impact of coronavirus?
- This article from the Guardian looks at the recession from a supply-side perspective
- This Financial Times article considers the range of policy options available to governments, on both the demand side and supply side
- The demand side and supply side causes and effects of the pandemic are considered in this article
ADDITIONAL TEACHER GUIDANCE
This lesson comprises:
- Around 25 minutes of guided video, spread across 3 videos
- Around 30 minutes of student thinking and activity time, embedded across the 3 videos (including analytical paragraph practice in in Video 2 and quantitative skills practice in Video 3)
- 2 interactive games, looking at infrastructure projects and types of economic system
- a starter activity, Design A City, to encourage creative thinking
- an additional activity on flexible labour markets, which includes a separate activity sheet and some suggested wider reading
- an additional activity on innovation, which includes an "assessment mat" for practising synoptic skills
- wider reading tasks
We estimate that the "core" of this lesson would take around 75 minutes, with the additional activities taking around an extra 60-90 minutes, depending on student ability.